The chair of the Irish Fiscal Advisory Council has warned of potential overheating of the economy in response to the housing crisis. 

He made his comments in an opening statement of the Oireachtas Budgetary Oversight Committee.

Seamus Coffey warned that if a sharper than expected recovery in housing construction was to take hold and overshoot annual requirements for housing completions, overheating could materialise in future years. 

Seamus Coffey also told the chair of the committee Fine Gael Deputy Josepha Madigan that the introduction of a Common Consolidated Corporation Tax Base in Europe could threaten the economy. 

"If the CCTB was introduction, it would have a big impact on our ability to collect corporation tax, which is now a relatively large share of overall tax revenue. It's approaching the highest its ever been, 15% of tax revenue comes from corporation," Mr Coffey told the committee. 

If this was subject to threat, Mr Coffey said this would mean adverse consequences for revenue and our ability to attract foreign investment. 

The Fiscal Advisory Council also warned against additional spending in 2017, saying that the fiscal rules already risked being breached this year. 

Mr Coffey told members of the committee that a balanced budget could have been achieved two years ahead of target.  

"Had unexpected corporation tax receipts and interest savings been used for deficit reduction, rather than for within-year spending increases in 2015 and 2016, the budget would have been in balance roughly two years earlier than is now projected," the economist stated. 

Looking further ahead, Mr Coffey said the Council sees risks that trend long-term growth rates for Ireland might be weaker should a harder-than-expected Brexit occur, or should risks related to US economic and tax policy materialise.